Sony’s CEO, Howard Stringer, has set off a lot of AV and movie industry speculation that the electronics super power and movie studio may be working to either become format “neutral” or might be working back channels to negotiate a deal to merge the Blu-ray format with the competing HD DVD format. These comments about the two formats being in a “stalemate” come as HD DVD has picked up significant momentum through its retail partners who a little more than a week ago were able to drop the price of HD DVD players to $99. Sony’s least expensive and most effective Blu-ray player is their Playstation 3 game console, which starts at $399.

More ammunition to the potential end of the format war is that both sides have backed away from their vast promotional campaign in print, on television and on the Internet at the least likely of times. With pre-Black-Friday sales sparking the sale of 90,000 HD DVD players clearly there are a lot of mainstream consumers sitting on the sidelines waiting to buy players yet both the HD DVD consortium and the Blu-ray Association seem to be watching how this fight progresses with a little conservatism as the all-important holiday season approaches.

A Sony format consultant, since the advent of the Compact Disc, suggests the idea that Sony might pull the plug on Blu-ray is “not going to happen” and notes that Blu-ray is not only supported by many of the top studios, it is also the backbone of Sony’s flagship game console. Video gaming leads to the main reason why Sony doesn’t need to admit defeat. Playstation coexists with Nintendo’s Wii and Microsoft’s Xbox 360 in a booming HD-driven gaming market. With Blu-ray powering Playstation 3 and studios like Disney and Fox as well as Sony Pictures cranking out 1080p movies for the format – why can’t consumers buy both players and both disc formats?

Imagine if Sony did pull the plug on Blu-ray – which they won't anytime soon – what type of message would Sony be sending to mainstream movie-buying consumers who have avoided both HD disc formats because of fears of a VHS versus Beta repeat that could result in them owning the wrong player and thousands of dollars in discs that are useless?

With the impressive volume of HDTVs being sold each month paired with the millions of legacy HDTVs currently installed in the marketplace – there is no reason to believe Sony or the HD DVD camp will be giving in anytime soon. If a deal was to happen where the formats would have been merged – it would have happened before either of the two competing formats launched. Warner recently announced that their attempt at software convergence of the formats with their TotalHD disc is postponed indefinitely. The only hope now for merging would be a takeover by combo-format players. For now, expect both to have a strong holiday selling season and grow as Playstation and Xbox did in years past.

This is so silly Sony’s CEO, Howard Stringer's remarks were taken Completely out of context.
Sony is fighting for Blu-Ray 110%.
Here is what was really said:

-begin excerpt-

Adler: Of course, one of the big fights right now is Blu-ray vs. HD-DVD for the high definition video market. I mean, the first and most obvious question is: Shouldn't there just be one format? Why should people have to choose between the two? And is there any possibility that we'll be heading there?

Stringer: I should point out that that is not part of the software battle. I mean, that's actually in some ways sort of anachronistic. We're fighting over a packaged goods hardware that will not go on forever, from a classic sense. We have a more expensive version, as Sony tends to, and Toshiba has a cheaper version, which seems to keep getting cheaper. I believe it has slowed down the progress of high definition packaged goods. Oddly, the studios kind of liked it for a while. They were able to leverage one of us against each other. But in the end, it's counterproductive. We have a sort of stalemate at the moment. As you know, they had fewer studios, but then they paid a lot of money for Paramount. So we have four studios and they have two or three studios. It's a difficult... it's a difficult fight. There was a chance to integrate it before I became CEO. This is something I inherited. And I don't know what broke down. I wish I could go back there, because I heard it was all about saving face and losing face, and all the rest of it. But it's not a battle about the digital future. That's what's so strange about it. If it doesn't work out, that doesn't say very much about where we're all going. It's just... it's a scorecard: one-nothing or something. But it doesn't mean as much as all that. PlayStation 3 will still go on playing games. It would have to have a different disk drive. And that's about it really.

Adler: So when a consumer now has to choose between the two, if they want to get into the high definition video, Wal-Mart was selling the Toshiba HD-DVD for $99 last Friday for a couple of days. Usually, it's been $199 there. I think your list price is $499 for Blu-ray. That's an enormously big difference, particularly in a slowing economy. Can you play that game with the difference being that great?

Stringer: Well... we've been selling them as fast as we're making them because the brand -- first of all, we're not the only ones selling them at that price. So is Panasonic, so is Samsung, so is Sharp. And one of the reasons it's more expensive is because it does more. The bandwidth is greater. If you just want a two-hour movie, the Toshiba version is a high definition picture. But we thought that to drive high definition into the customer's imagination, you should future-proof the disks so that you could have director's cuts, which are fairly obvious. We have six to seven hours of bandwidth available. You can have interactivity in three dimensions. We would be prepared to allow the package goods to survive much longer by making it much more innovative. But that does make the player more expensive. Now, they all come down. The race is to bring costs down. It always is in consumer electronics. So it isn't going to stay at $499.

Adler: But are you surprised by how little Toshiba can sell its unit for?

Stringer: No, because -- look, I can sell it for a dollar. I'd lose a lot of money, but if you want to go that route, it's a tough competition, and it seems to be about a lot of things, including face. So if you want to cut the price down and engage us in a price war, that's a different system. We were trying to win on the merits, which we were doing for a while until Paramount changed sides.

Adler: Microsoft seems to have an interesting role in this. They're selling add-on HD-DVD drives for the -- they're taking HD-DVD to the Xbox, and Xbox competes strongly with you. Is Microsoft kind of working in cahoots or in alliance with Toshiba on HD-DVD? Is that a competitive challenge to you?

Stringer: Only the spirits know. [laughs] Yeah... you never know with Microsoft do you? You never know. Xbox versus PS3 is sort of a subplot. What Microsoft's role is in that? I don't know. We're still selling software at a faster level than Toshiba. Obviously, we care about the software side more than the Toshiba does. It doesn't have a studio. It doesn't own a studio. So it's in our interest to -- actually the most significant thing in some ways about Blu-ray, going back to Microsoft... the Blu-ray Disc has a very high security level, which Fox in particular, but also other studios, was most excited about -- wanted to have some protection from instant ripping. So the specs that went into the Blu-ray, which were done in conjunction with many studios, had this security level. That is probably not in Microsoft's interests. The Toshiba disk is certainly far easier to rip. Whether you like that or don't like that depends on your consumer enthusiasm.

Sony’s CEO, Howard Stringer, has set off a lot of AV and movie industry speculation that the electronics super power and movie studio may be working to either become format “neutral” or might be working back channels to negotiate a deal to merge the Blu-ray format with the competing HD DVD format. These comments about the two formats being in a “stalemate” come as HD DVD has picked up significant momentum through its retail partners who a little more than a week ago were able to drop the price of HD DVD players to $99. Sony’s least expensive and most effective Blu-ray player is their Playstation 3 game console, which starts at $399.

More ammunition to the potential end of the format war is that both sides have backed away from their vast promotional campaign in print, on television and on the Internet at the least likely of times. With pre-Black-Friday sales sparking the sale of 90,000 HD DVD players clearly there are a lot of mainstream consumers sitting on the sidelines waiting to buy players yet both the HD DVD consortium and the Blu-ray Association seem to be watching how this fight progresses with a little conservatism as the all-important holiday season approaches.

A Sony format consultant, since the advent of the Compact Disc, suggests the idea that Sony might pull the plug on Blu-ray is “not going to happen” and notes that Blu-ray is not only supported by many of the top studios, it is also the backbone of Sony’s flagship game console. Video gaming leads to the main reason why Sony doesn’t need to admit defeat. Playstation coexists with Nintendo’s Wii and Microsoft’s Xbox 360 in a booming HD-driven gaming market. With Blu-ray powering Playstation 3 and studios like Disney and Fox as well as Sony Pictures cranking out 1080p movies for the format – why can’t consumers buy both players and both disc formats?

Imagine if Sony did pull the plug on Blu-ray – which they won't anytime soon – what type of message would Sony be sending to mainstream movie-buying consumers who have avoided both HD disc formats because of fears of a VHS versus Beta repeat that could result in them owning the wrong player and thousands of dollars in discs that are useless?

With the impressive volume of HDTVs being sold each month paired with the millions of legacy HDTVs currently installed in the marketplace – there is no reason to believe Sony or the HD DVD camp will be giving in anytime soon. If a deal was to happen where the formats would have been merged – it would have happened before either of the two competing formats launched. Warner recently announced that their attempt at software convergence of the formats with their TotalHD disc is postponed indefinitely. The only hope now for merging would be a takeover by combo-format players. For now, expect both to have a strong holiday selling season and grow as Playstation and Xbox did in years past.

by: Jerry Del Colliano

They aren't pulling the plug.

However they are trying to end the "stalemate."

For those who think Howard didn't think about what he was saying:

He knew exactly what he was saying. A "Stalemate," is a move in chess where NEITHER side can make a move or win. For the past 2 years we've heard Sony say they were going to win, and then he says "nobody is going to win."

Sony doesn't want another SACD.

That's what they have right now. Industry Analysts are not being nice with their BD sales expectations for Christmas. They give HD DVD the edge and it's due to price. The bottom line is that people are willing to gamble when it costs them less money.

The problem with the PS, XBox, Nintendo analogy is that they play games and all three have games that are proprietary. A Movie isn't considered a proprietary product to consumers. Consumers expect EVERY studio to back their player. It's what happened with VHS, Tapes, CDs, and DVD. They don't want two players for movies.

Sony does have people currently speaking with Toshiba about trying to end this mess.

This is so silly Sony’s CEO, Howard Stringer's remarks were taken Completely out of context.
Sony is fighting for Blu-Ray 110%.

Yeah. That is what he said. It has not been taken out of context. The most alarming statement he made was "But it doesn't mean as much as all that. PlayStation 3 will still go on playing games." He says that right after talking about it as a score. That's not winner talk.

They expected to win due to Studio Support, and then they were the first to lose a Studio, that's a massive loss and it has hurt (which he admitted). He also mentions that for SONY software is really important to them.

You don't think he noticed the 170,000 units that Transformers supposedly moved on HD DVD? That would be 300,000+ units for BD. That's a hard number not to look at and go, we "lost," that. In addition he has to wonder what titles SONY owns that could sell an additional 100,000+ units on HD DVD.

He also states the differences between the two units (and supports that they do cost more). He is making a play for why people should pay more. He also talks specifically about packaged goods and how neither format is being packaged with HDTV sales which are in the millions every month.

For one or both formats to really make it they have to start selling in numbers they are no where near now. Only one of them has had a good week in hardware and that was Toshiba and we all know the story behind that.

A move by Stringer to bring "neutrality," to the front would take time. If all the studios started releasing on both formats, that move wouldn't happen until at the earliest next Spring or Summer. Most likely in the Summer.

What does BD have going for it with that deal? In that time frame we will see two things:

Likely a $149 or $199 HD DVD player MSRP.
Likely the first sub $300 BD player at $249 MSRP.

For $100 more (instead of twice as much or more) people will be able to buy a BD player. Sony themselves plan on a $299 player for next Summer. At that price point, and with a neutral front, consumers will start buying. Many who think quality does matter over price will buy BD.

That's not a bad "battle," to fight especially when you consider that by the time that rolls around he'll have over 15M PS3s in NA, not to mention likely 1M standalone BD players.

Yeah. That is what he said. It has not been taken out of context. The most alarming statement he made was "But it doesn't mean as much as all that. PlayStation 3 will still go on playing games." He says that right after talking about it as a score. That's not winner talk.
.

I am referring to the starting post and all of the hoopla that has ensued due to news sites posting half quotes out of context which has led thread titles such as:"Is Sony Ready To Pull The Plug On Blu-ray?"
If you think for one second that him saying "But it doesn't mean as much as all that. PlayStation 3 will still go on playing games." gives any indication that Sony does not care one way or another you are certainly mistaken. It's his job to make it look easy and non contentious .

I am referring to the starting post and all of the hoopla that has ensued due to news sites posting half quotes out of context which has led thread titles such as:"Is Sony Ready To Pull The Plug On Blu-ray?"
If you think for one second that him saying "But it doesn't mean as much as all that. PlayStation 3 will still go on playing games." gives any indication that Sony does not care one way or another you are certainly mistaken. It's his job to make it look easy and non contentious .

No one is taking anything he is saying out of context. The man went from declaring victory to calling it a "stalemate," referred to the race as "doesn't mean as much as all that." Declared that even if they lose they still have the PS3.

When has Howard Stringer or Sony ever said anything close to that? Never. Obviously Sony "cares," but they went from declaring victory to mentioning stalemate. I'm sorry but that is news and it's not taken out of context at all.